How Vijay Mallya Became SBI’s ‘Wilful Defaulter’
Vijay Mallya can’t withdraw the money he is getting from Diageo, rules Debt Recovery Tribunal in the default case.
advertisement
Passing an order that can be the first step towards granting SBI and the cluster of banks a first right on the payout deals of liquor baron Vijay Mallya, the Debt Recovery Tribunal (DRT) at Bengaluru has said that, “Vijay Mallya can’t withdraw the amount of $75 million that he is entitled to receive from Diageo, till the case is disposed of.”
The Debt Recovery Tribunal was approached by SBI to seek ‘first right’ on the payout.
The court has asked Mallya to reveal all the details regarding the deal. It has directed Diageo to not disburse any amount till the case is on.
SBI has also filed applications, to seek Mallya’s arrest, impounding of his passport and action against him for defaulting on loans that will be heard on 28th March.
SBI, which leads the consortium of 17 banks that lent money to the grounded Kingfisher Airlines, had moved DRT against Vijay Mallya, to recover over Rs 7,000 crore of dues from him.
ED Registers Case Against Mallya
Earlier in the day, the Enforcement Directorate (ED) registered a case against Vijay Mallya and top executives of long-defunct Kingfisher Airlines, under the Prevention of Money Laundering Act (PMLA), in a bank fraud case.
The ED case is a separate criminal proceeding based on CBI’s findings against Mallya and others in a bank fraud case.
‘No Regrets as Such’
Vijay Mallya, on Sunday, blamed the media for spoiling his reputation and sought to clarify why his dream airline failed.
“The past few days have witnessed a near-hysterical campaign in the media directed against me,” Mallya said in a belated statement.
Mallya struck a controversy after responding to a question regarding his regrets for Kingfisher, he said, “I have no regrets as such. Perhaps the only regret is that Kingfisher Airlines is not flying today when the oil price is so low,”
Vijay Mallya is keen to move to England, to ‘stay close to his family.’
“Wilful Defaulter”
In November 2015, SBI declared Mallya a “wilful defaulter”, a term that means the company or individual who borrowed money has no intention of paying it back, has diverted the money to some purpose other than the one for which it was borrowed, or has sold the asset acquired or developed with the money without knowledge of the lender.
Many including, Central Bureau of Investigation director Anil Sinha have blamed commercial banks for the delay in declaring Kingfisher Airlines and Mallya as defaulters.
In most instances, the Indian courts have not been able to tighten the noose in the cases of ‘wilful-defaults’, making the crony promoters happy. Most of them have managed to use the judiciary to their advantage for delaying the loan recovery process and leaving the banking system helpless.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)